A fractional pip, also known as a pipette, is a smaller unit of measurement used in forex trading that is one-tenth of a pip. While a pip represents the smallest price change that a currency pair can make, a fractional pip allows for even greater precision in price movements and can be particularly useful for traders using higher leverage.

For example, if the EUR/USD currency pair is trading at 1.12345 and moves up to 1.12355, this would represent a change of 1 pip. However, if the price moves up to 1.12352, this would represent a change of 7 fractional pips, or 0.7 pips.

Traders can use fractional pips to better manage their risk and optimize their position sizing, as they allow for more accurate calculations of potential profits and losses. However, not all brokers offer fractional pip pricing, and traders should be aware of the potential impact of spreads and other trading costs on their overall profitability.

A fractional pip, also known as a pipette, is one-tenth of a regular pip. In forex trading, a pip (percentage in point) typically represents the smallest standard price movement in currency pairs, usually the fourth decimal place (0.0001) for most pairs. However, some brokers offer more precise pricing by adding a fifth decimal place (0.00001). This fifth digit is the fractional pip. For example, if EUR/USD moves from 1.10500 to 1.10510, that’s a one-pip movement, but moving from 1.10500 to 1.10501 is one fractional pip. Fractional pips allow for tighter spreads and more accurate pricing, which can be beneficial for high-frequency or scalping strategies. They enhance market precision but don’t significantly change overall trading strategies.